Prime Minister Tony Abbott hardened his stance on government assistance to business, rejecting SPC Ardmona's request for a $25 million co-investment in the fruit processor and calling on the company to renegotiate conditions in its ''extraordinary'' enterprise agreement with workers.

In a decision that could risk up to 3000 jobs in Victoria's Goulburn Valley, Mr Abbott supported Liberal economic dries including Treasurer Joe Hockey and Finance Minister Mathias Cormann to knock back the request after a three-hour cabinet discussion.

History of SPC Ardmona.

Industry Minister Ian Macfarlane and Agriculture Minister Barnaby Joyce had backed the company's request, which would also have triggered a $25 million investment from the Victorian government and ensured SPC's parent company, Coca-Cola Amatil, would spend up to $161 million on the canning facilities.

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SPC managing director Peter Kelly said the decision would trigger a review of the company's manufacturing operations.

The Napthine government described the decision as a ''significant setback'' and is bracing for the loss of thousands of jobs in the Goulburn Valley in the lead-up to the November state election.

"The town is going to be decimated because so many industries rely on the fruit industry": Shepparton district farmer Gary Godwill. Photo: Angela Wylie

Mr Abbott said Coca-Cola Amatil had posted a half-year profit of $216 million to June 2013, and had signalled its willingness to invest $161 million in its manufacturing operations, and there was ''no way'' the government wanted to see workers take a pay cut.

''It is very important that they complete the renegotiation they have embarked upon. It is very important they complete the negotiation of the enterprise bargaining agreement … there are wet allowances, there are loadings, there are extensive provisions to cash out sick leave, there are extremely generous redundancy provisions,'' he said.

''The decision that came from the cabinet today sets an important marker. This is a government that will make sure that the restructure that some Australian businesses need … is led by business.''

Prime Minister Tony Abbott. Photo: Alex Ellinghausen

He said Coca-Cola Amatil ''truly has the resources to ensure that SPC Ardmona is in a strong position to restructure'', challenging company chairman David Gonski to not let SPC workers down.

Deputy Premier Peter Ryan said Victoria was very concerned about the impact of Canberra's decision, vowing to work to secure the company's future in the Goulburn Valley.

State Opposition Leader Daniel Andrews said the decision was a betrayal of the valley community, which had sent Liberal and National MPs to Canberra and Spring Street for generations and been taken for granted.

Illustration: Ron Tandberg.

The Australian Manufacturing Workers' Union condemned the decision, saying the Abbott government had shown it believed the only way to achieve productivity was to cut wages, conditions and jobs.

Coca-Cola Amatil said it would be forced to consider ''alternative plans'' for its SPC Ardmona plant as its commitment was dependent on the receipt of both the federal and Victorian government grants.

Chief executive Terry Davis said the company was disappointed as it had presented a solid business case and committed to a significant and much greater investment to transform the Goulburn Valley plant into a high-tech facility.

275 comments

Tony Abbott says, ''It is very important that they complete the renegotiation they have embarked upon. It is very important they complete the negotiation of the enterprise bargaining agreement … there are wet allowances, there are loadings, there are extensive provisions to cash out sick leave, there are extremely generous redundancy provisions,''. The workers’ conditions it seems are peeving Tony Abbott. Is this in comparison to say a politicians base salary of $195K. Plus loading $39,038(median), plus electorate allowance $32,000(min), plus travel allowance $27,561(avg), plus overseas travel $42,576(avg), plus domestic flights $47,520, plus car costs $35,348, plus office admin costs $114K, plus telecommunications $14,635, plus family travel $5986? (All figures sourced The Age Oct 2013). And let’s not forget taxpayer funded trips to Port Macquarie for Prime Minister Ironman. Or Indian weddings. Or custom made bookshelves and the books to fill them. Did somebody just mention lucrative and lifelong super schemes? With 3000 Australian jobs set to be lost overseas The Prime Minister ''appears to take everybody's side but our own'', and lacks ''at least some basic affection for the home team''.

Commenter

Joe Citizen

Location

Melb

Date and time

January 31, 2014, 7:06AM

That is an excellent comment. And the way the government makes it so difficult for companies to run in Australia, by taxing through the wahzoo (payroll tax a good example), then shuts the door when assistance is required, is ridiculous. What a terrible decision. The assistance amount is nothing.

Soon everyone will be a lawyer or will work in compliance, then all of a sudden Australia will realise these jobs contribute nothing to the economy and we're done for.

Commenter

Sir Enviroman

Location

Melbourne

Date and time

January 31, 2014, 7:23AM

Sorry shep but you voted for a puppet of uncle Rupert and auntie gina. Neither have an interest in you, so what could you expect. Now if we had a mining and carbon tax there may have been some in the kitty to help get you going.

Commenter

Bg2

Date and time

January 31, 2014, 7:24AM

Yes, it's pathetic and hypocritical. It's apparently alright for Abbott to benefit from archaic conditions (especially those redundancy provisions!) but not OK for factories to have decent working conditions so they can attract staff.

Commenter

Mardi

Location

Tuggeranong

Date and time

January 31, 2014, 7:36AM

Well said!!

Commenter

Not Amused

Date and time

January 31, 2014, 7:39AM

Yes he does take everybody else's side but our own……more "FREE" trade agreements to come as we give over what little manufacturing we have to countries that can employ people for $2 a day.

Commenter

The Visionless Quarter

Date and time

January 31, 2014, 7:42AM

Your forgetting that the conditions given to employees costs the business, dearly and many cases the business is forced into bankrupt because of these over generous conditions.

Commenter

Muphin

Location

Tewantin

Date and time

January 31, 2014, 7:44AM

Spot on Joe Citizen. He's happy for them to lose all of their conditions, probably their jobs, for growers to be forced off the land, but there is " 'no way' the government wanted to see workers take a pay cut."Right.What happens when, over what in the greater scheme of things is a tiny figure (houses in Tony's electorate sell for $25million), the surrounding farmland is rendered 'worthless' (at least for the purposes of the farmers currently trying to survive on it) and it is sold off for a pittance to some conglomerate in China? Have we been dropped on our collective heads? Mining booms are not the only things that keep Australians working. We need to get rid of this fool.

Commenter

Mrs Kensington

Date and time

January 31, 2014, 7:45AM

Rorting the system is an Australian political tradition. We have some fine role models in the current Government......

Commenter

Shane From Melbourne

Date and time

January 31, 2014, 7:46AM

Joe, Somewhat reminiscent of his tirade against the ABC. When it comes to SPC it appears as you suggest that he is not cheering for the home team. But then again Tony and his team of economic dries are leaving us in no doubt that "tunnel vision" is their forte.

31 Jan
In August, during the federal election campaign, then opposition leader Tony Abbott said that when in government he would lend $16 million to British chocolate company Cadbury to secure jobs in Tasmania. On Thursday cabinet baulked at extending $25 million in aid to fruit canner SPC Ardmona, which is owned by the local Coke bottler Coca-Cola Amatil.

31 Jan
A Productivity Commission paper on government assistance to car makers will recommend the federal government reassess industry assistance and question the economic benefits of billions in subsidies.